Amendment of section 54F.
30. In section 54F of the Income-tax Act, with effect from the 1st day of April, 2024,––
(a) in sub-section (1), after the proviso and before the Explanation, the following proviso shall be inserted, namely:––
“Provided further that where the cost of new asset exceeds ten crore rupees, the amount exceeding ten crore rupees shall not be taken into account for the purposes of this sub-section.”;
(b) in sub-section (4),––
(i) after the words “amount so deposited shall”, the words, brackets and figure “, subject to the second proviso to sub-section (1)” shall be inserted;
(ii) after the proviso, the following proviso shall be inserted, namely:––
“Provided further that the net consideration in excess of ten crore rupees shall not be taken into account for the purposes of this sub-section.”.
Notes on Clauses:
Clause 30 of the Bill seeks to amend section 54F of the Income-tax Act relating to capital gain on transfer of certain capital assets not to be charged in case of investment in residential house.
Sub-section (1) of the said section, inter alia, allows deduction on the capital gains arising from the transfer of long-term capital asset, not being a residential house, if an assessee, within a period of one year before or two years after the date on which the transfer took place purchased one residential property in India, or within a period of three years after that date constructed one residential property in India.
It is proposed to insert a second proviso to the said sub-section so as to provide that where the cost of new asset exceeds ten crore rupees, the amount exceeding ten crore rupees shall not be taken into account for the purposes of that sub-section.
It is further proposed to insert a proviso to provide that the amount of net consideration in excess of rupees ten crores will not be taken into account for the purposes of sub-section (4).
These amendments will take effect from 1st April, 2024 and shall accordingly, apply in relation to the assessment year 2024-2025 and subsequent assessment years.
